Atlas Pipeline Partners, L.P. Reports Results for the Three Months Ended March 31, 2005.PHILADELPHIA Philadelphia, ancient cities Philadelphia, name of several ancient cities. One was in Lydia, W Asia Minor (now W Turkey). At the foot of Mt. Tmolus and near the location of modern Alaşehir, it was founded in the 2d cent. B.C. -- Atlas Atlas, in Greek mythology Atlas (ăt`ləs), in Greek mythology, a Titan; son of Iapetus and Clymene and the brother of Prometheus. Pipeline Partners, L.P. (NYSE NYSE See: New York Stock Exchange :APL (A Programming Language) A high-level mathematical programming language noted for its brevity and matrix generation capabilities. Developed by Kenneth Iverson in the mid-1960s, it runs on micros to mainframes and is often used to develop mathematical models. ) (the "Partnership or APL") reported: --Revenues of $47.3 million for the three months ended March 31, 2005 compared to $4.2 million for the three months ended March 31, 2004. --Earnings before interest, taxes, depreciation and amortization ("EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become "), a non-GAAP measure, was $7.7 million for the three months ended March 31, 2005 compared to $3.1 million for the three months ended March 31, 2004 - a 148% increase. --Our distribution for the three month period ended March 31, 2005 was $.75 per limited partner unit compared to $.63 per limited partner unit for the three month period ended March 31, 2004 - a 19% increase as a result of the continued growth in distributable cash flow generated by our operations. --Net income was $4.3 million or $.39 per limited partner unit for the three months ended March 31, 2005 compared to $2.5 million or $.49 per limited partner unit for the three months ended March 31, 2004. The significant increase in revenue, EBITDA, net income and quarterly distribution from period to period is reflective Refers to light hitting an opaque surface such as a printed page or mirror and bouncing back. See reflective media and reflective LCD. of our continued growth, including the July July: see month. 2004 acquisition of our initial Oklahoma Oklahoma (ōkləhō`mə), state in SW United States. It is bordered by Missouri and Arkansas (E); Texas, partially across the Red R. (S, W); New Mexico, across the narrow edge of the Oklahoma Panhandle (W); and Colorado and Kansas (N). operations, and the resulting growth in cash available for distribution. Net income per limited partner unit decreased largely as a result of substantial increases in non-cash expense Noun 1. non-cash expense - an expense (such as depreciation) that is not paid for in cash disbursal, disbursement, expense - amounts paid for goods and services that may be currently tax deductible (as opposed to capital expenditures) , principally a tax-sheltering rise in depreciation and amortization. Furthermore common units outstanding during the three months ended March 31, 2005 increased substantially as a result of the Partnership's issuing 2.85 million units in follow-on fol·low-on adj. Following as a related or consequent aspect or development: "Such contracts involve follow-on sales of maintenance services" Christian Science Monitor. equity offerings in April and July 2004. The following table reconciles EBITDA to our net income for the three months ended March 31, 2005 and 2004. (See Note 1)
Three Months Ended
March 31,
--------------------------
2005 2004
------------ -------------
(in thousands - unaudited)
Net income $4,250 $2,477
Non-cash gain on derivative value (75) -
Non-cash compensation 449 -
Interest expense 1,135 63
Depreciation and amortization 1,929 518
------------ -------------
EBITDA (see Note 1) $7,688 $3,058
============ =============
Note 1. EBITDA represents net income before non-cash gain on
derivative value, non-cash compensation, interest expense,
income tax (not applicable to the Partnership), depreciation
and amortization. Management of APL believes that EBITDA
provides additional information with respect to APL's ability
to meet its debt service, capital expense and working capital
requirements. EBITDA is a commonly used measure of a
business' ability to generate cash flow without consideration
of its financing structure. This measure is widely used by
commercial banks, investment bankers, rating agencies and
investors in evaluating performance relative to peers and
pre-set performance standards. It is also a financial
measurement that, with certain negotiated adjustments, is
reported to APL's banks to establish conformance with its
financial covenants under its current credit facility. EBITDA
is not a measure of financial performance under GAAP and,
accordingly, should not be considered as a substitute for net
income, or cash flows from operating activities prepared in
accordance with GAAP.
Highlights of the Quarter: Corporate Activity --In March 2005 we agreed to acquire the "Elk City Elk City can refer to:
Elk City is located at (35.402694, -99. . This transaction was successfully closed in April 2005 utilizing a new $270 million credit facility - after the end of our first quarter and is not included in these financial statements. --In March 2005 we declared de·clare v. de·clared, de·clar·ing, de·clares v.tr. 1. To make known formally or officially. See Synonyms at announce. 2. To state emphatically or authoritatively; affirm. 3. our largest regular quarterly distribution in the amount of $.75 per unit. --During the first quarter of 2005 and more recently in April 2005 we added to our hedge position to enhance our revenue stability through 2007.
Operating Activity
-- In the Mid-continent - Velma System
-- We added 37 wells to our system in the three
months ended March 31, 2005 - a total of 128 new
wells since we acquired these operations in July
2004.
-- Our processed gas stream averaged 77,763 million
British Thermal Units (mmbtu) per day (equivalent
to 64,956 thousand cubic feet per day) during the
three month period ended March 31, 2005 resulting
in equity sales averaging 4,972 mmbtu per day of
gas, 1,551 barrels per day of natural gas liquids
and 243 barrels per day of condensate.
-- In Appalachia
-- We connected 87 new Atlas America wells to our
system in the quarter ended March 31, 2005
compared to 79 wells in the similar period ended
March 31, 2004. We connected 364 wells during the
twelve months ended March 31, 2005, including 21
third party wells, compared to 274 in the similar
period ended March 31, 2004.
-- Our throughput increased to an average of 52.4
million cubic feet per day compared to 51.4
million cubic feet per day in the similar period
ended March 31, 2004. The average transportation
rate increased to $1.03 per mcf during the similar
period ended March 31, 2005 from $.90 per mcf
during the three months ended March 31, 2004.
Atlas Pipeline Partners, L.P. is active in the gas gathering and processing segment of the mid-stream natural gas industry. In the Mid-Continent region of Oklahoma and northern Texas and, including the April 14, 2005 acquisition of the Elk City system, APL owns and operates approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 2,200 miles of gas gathering pipeline. APL transports approximately 325 million cubic feet of gas per day from more than 880 receipt points or wells to its gas processing and treating facilities in Velma, Elk City and Prentiss, Oklahoma where natural gas liquids (NGL NGL - A dialect of IGL. ) and impurities are removed. APL then sells the resulting residue residue n. in a will, the assets of the estate of a person who has died with a will (died testate) which are left after all specific gifts have been made. Typical language: "I leave the rest, residue and remainder [or just residue] of my estate to my grandchildren. gas and NGL and remits a portion of those proceeds to the producer. In Appalachia Appalachia, region: see Appalachian Mountains. Appalachia West Virginia coal mining region known for its abysmal poverty. [Am. Hist.: NCE, 160] See : Poverty , it owns and operates more than 1,440 miles of natural gas gathering pipelines in western Pennsylvania Western Pennsylvania consists of the western third of the state of Pennsylvania in the United States. Pittsburgh is the largest city in the region, with a metropolitan area of about 2.4 million people, and is the cultural center for Western Pennsylvania. , western New York
Western New York refers to the westernmost region of New York State. and eastern Ohio to which more than 4,800 wells are currently connected. APL gathers approximately 52.4 million cubic feet ("mmcf") of gas per day from these wells. In the Mid-Continent and in Appalachia the fees paid to APL are based on a percentage of the gross selling price of the gas or NGL, fixed fee per mcf transported or on percent of index. For more information, visit our website at www.atlaspipelinepartners.com or contact pschreiber@atlaspipelinepartners.com. Atlas America America [for Amerigo Vespucci], the lands of the Western Hemisphere—North America, Central (or Middle) America, and South America. The world map published in 1507 by Martin Waldseemüller is the first known cartographic use of the name. , Inc. (Nasdaq:ATLS ATLS Advanced Trauma Life Support ATLS Aerial Target Launch Ship ), the parent company of Atlas Pipeline Partners, L.P.'s general partner, and owner of 1,641,026 units of limited partner interest of APL, is an energy company engaged primarily in the development and production of natural gas in the Appalachian Ap`pa`la´chi`an a. 1. Of or pertaining to a chain of mountains in the United States, commonly called the Allegheny ltname> mountains. Noun 1. Basin BASIN Boulder Area Sustainability Information Network (Boulder, Colorado) BASIN Brothers And Sisters In Need for its own account and for its investors through the offering of tax advantaged investment programs. For more information, please visit our website at www.atlasamerica.com, or contact investor relations Investor relations The process by which the corporation communicates with its investors. at pschreiber@atlasamerica.com. Statements made in this release may include forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. , which involve substantial risks and uncertainties. The Partnership's actual results, performance or achievements could differ materially from those expressed or implied Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. in this release as a result of many factors, including competition within the energy industry, climactic cli·mac·tic also cli·mac·ti·cal adj. Relating to or constituting a climax. cli·mac  ti·cal·ly adv.Adj. 1. conditions, volatility Volatility 1. A statistical measure of the tendency of a market or security to rise or fall sharply within a period of time. 2. A variable in option pricing formulas that denotes the extent to which the return of the underlying asset will fluctuate between now and the in the price of gas in the Appalachian and mid-continent area, actual versus projected drilling activity, volumetric volumetric /vol·u·met·ric/ (vol?u-met´rik) pertaining to or accompanied by measurement in volumes. vol·u·met·ric adj. Of or relating to measurement by volume. production from wells connected to the Partnership's gas-gathering pipeline system, and the cost of supplies and services in the energy industry and the other factors disclosed dis·close tr.v. dis·closed, dis·clos·ing, dis·clos·es 1. To expose to view, as by removing a cover; uncover. 2. To make known (something heretofore kept secret). under "risk factors" in our most recent 10-K. The remainder of this release contains the Partnership's consolidated balance sheets consolidated balance sheet A balance sheet in which assets and liabilities of a parent company and its controlled subsidiaries are combined, thereby presenting balance sheet items for the parent and its subsidiaries as if they were a single firm. , statements of income and information related to its throughput The speed with which a computer processes data. It is a combination of internal processing speed, peripheral speeds (I/O) and the efficiency of the operating system and other system software all working together. 1. volumes and related rates In differential calculus, related rates problems involve finding the rate at which a quantity is changing by relating that quantity to other quantities whose rates of change are known. The rate of change is usually with respect to time. during the periods indicated.
ATLAS PIPELINE PARTNERS, L.P. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except unit data)
March 31, December 31,
ASSETS 2005 2004
----------- ------------
(Unaudited)
Current assets:
Cash and cash equivalents $ 9,695 $ 18,214
Accounts receivable-affiliates - 1,496
Accounts receivable 16,566 13,769
Prepaid expenses 1,155 1,056
----------- ------------
Total current assets 27,416 34,535
Property, plant and equipment, net 179,847 175,259
Goodwill (net of accumulated amortization of
$285) 2,305 2,305
Other assets 6,319 4,686
----------- ------------
$ 215,887 $ 216,785
=========== ============
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Current portion of long-term debt $ 2,303 $ 2,303
Accrued liabilities 2,677 2,619
Hedge liability 8,673 1,959
Accrued producer liabilities 12,456 10,996
Accounts payable 1,395 2,341
Accounts payable - affiliates 963 -
Distribution payable 6,904 6,467
----------- ------------
Total current liabilities 35,371 26,685
Other long-term liabilities 3,160 1,247
Long-term debt, less current portion 51,570 52,149
Commitments and contingencies - -
Partners' capital:
Common unitholders; 7,204,790 and 5,563,659
units outstanding 133,192 135,759
Subordinated unitholder, 0 and 1,641,026
units outstanding - 2
General partner 2,181 2,261
Accumulated other comprehensive loss (9,587) (1,318)
----------- ------------
Total partners' capital 125,786 136,704
----------- ------------
$ 215,887 $ 216,785
=========== ============
ATLAS PIPELINE PARTNERS, L.P. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 2005 AND 2004
(in thousands, except per unit data)
(Unaudited)
2005 2004
-------- -------
Revenues:
Natural gas and liquids $42,334 $ -
Transportation and compression - affiliates 4,847 4,193
Transportation and compression - third party 15 17
Interest income and other 81 36
-------- -------
Total revenues and other income 47,277 4,246
Costs and expenses:
Natural gas and liquids 35,459 -
Plant operating 1,204 -
Transportation and compression 676 607
General and administrative 1,975 468
Compensation reimbursement - affiliates 513 113
Terminated acquisition costs 136 -
Depreciation and amortization 1,929 518
Interest 1,135 63
-------- -------
Total costs and expenses $43,027 $1,769
======== =======
Net income $ 4,250 $2,477
======== =======
Net income - limited partners $ 2,830 $2,122
======== =======
Net income - general partner $ 1,420 $ 355
======== =======
Basic and diluted net income per limited partner unit $ .39 $ .49
======== =======
Weighted average limited partner units outstanding 7,205 4,355
======== =======
Results of Operations:
The following table sets forth certain information relating to the
average volumes transported or delivered, average gross margin rate
per mcf and average transportation rates per mcf for the periods
indicated.
Three Months Ended
March 31,
-------------------
2005 2004
--------- ---------
(Unaudited)
Mid-Continent - Velma System
--------------------------------------------------
Gas
Gross natural gas processed - mmbtu /day 77,763 -
Gross residue natural gas - mmbtu/day 50,096 -
Gross natural gas sales - mmbtu/day 47,231 -
Equity natural gas sales - mmbtu/day 4,972 -
Gross margin (in thousands) $ 2,519 -
Natural gas sales equity percentage 11% -
Natural Gas Liquid
Gross NGL sales - barrels/day 6,403 -
Equity NGL sales - barrels/day 1,551 -
NGL gross margin $ 3,963 -
NGL equity percentage 24% -
Condensate
Gross condensate sales - barrels/day 243 -
Equity condensate sales - barrels/day 243 -
Condensate gross margin $ 702 -
Appalachia
--------------------------------------------------
Gas
Throughput - mcf/day 52,371 51,437
Average transportation rate per mcf $ 1.03 $ .90
Total transportation and compression revenue
(in thousands) $ 4,862 $ 4,210
--------------------------------------------------
Mmbtu - million British Thermal Units
Mcf - thousand cubic feet
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